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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Advisory on Inventory Management for Market Makers on SME Platform

30-Jul-2024 | NSE/SURV/63146

NSE has issued the circular with reference to SEBI Circular nos. CIR/MRD/DP/14/2010 dated April 26, 2010, CIR/MRD/DSA/17/2010 dated May 18, 2010 and Exchange Circular no. NSE/SME/MEM/21427 dated on August 06, 2012 regarding Market Makers on SME platform an.d SEBI Circular no. CIR/MRD/DSA/31/2012 dated November 27, 2012 regarding Inventory Management for Market Makers of SME Exchange / Platform.

By virtue of this notification, the Market Makers are advised to follow the guidelines as mentioned in the circular, while managing their inventory during the process of market making:-

1. In the event the Market Maker exhausts the inventory (i.e., Initial allotment and/or shares acquired during the market making process) through market making process on the platform of the exchange:-

1.1. Market Maker shall inform the Exchange about the inventory exhaustion in the prescribed format (Refer Annexure 1) along with copy of the relevant demat account transaction-cumholding statement (duly certified/stamped by the Depository Participant) evidencing the same.
1.2. Market Maker shall continue the market making process by providing one-way ?Buy? quote for atleast 75% of time in a day, until the new inventory is acquired (i.e., shares acquired during the market making process) for the security.
2. Upon acquiring the new inventory, Market Maker shall resume to provide two-way quotes for atleast 75% of time in a day, within permissible bid-ask spread limit as per the obligations and responsibilities of market maker mentioned in SEBI circular dated April 26, 2010 and Exchange circular dated August 6, 2012.

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